A company has a new plant A and an old plant B in the same metropolitan area, each with a capacity of 12 units of product per month. Fixed expense at A is 40,000 per month and at B are 20,000 per month. Variable expense per month at A is Php1,000x? , where N = the number of 2 units produced. At B it is Php2,000 x ? , where M is the number of units produced. At present 2 the sales have been established at 14 units per month with each plant producing 7 units. Should the interplant load be redistributed? Why? How

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Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.